Oreo-maker Mondelez is bracing for Brexit - saying the pound's drop and price spikes may hurt sales of chocolate, cookies, and candy
- The maker of Oreo and Cadbury Dairy Milk prepared for the worst ahead of the UK's scheduled departure from the European Union in March.
- Ahead of the new Brexit deadline, Mondelez plans to stockpile raw ingredients, lease extra warehouse space, and contract more delivery trucks for the second time this year.
- While the confectioner is confident it can ride out supply-chain disruptions, it fears Brexit could devalue the British pound, spark inflation, and weaken consumer confidence.
- Watch Mondelez trade live.
"We are going to put the plan back in motion," Van de Put said on the call. If worst comes to worst, Mondelez's UK production facilities should be capable of satisfying Brits' snacking needs, he added.While Mondelez is confident it can ride out any supply-chain disruptions caused by Brexit, there are other risks it can't control.
"There will be most likely an immediate currency devaluation on top of what we have seen these last couple of days," finance chief Luca Zaramella said on the call. "We will also see potentially inflation running up," he continued, which "might hamper consumer confidence.""That might be detrimental not only to our business but to the overall economy," Zaramella added.The delay to Brexit has been costly and disruptive for numerous UK companies. For example, car companies scheduled their annual halt in production to coincide with the original Brexit timeline, removing that option from the table in October.
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